Mitsubishi Motors shares dive, Japan officials raid facility

Thu Apr 21, 2016 8:33am EDT
 
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By Chang-Ran Kim

TOKYO (Reuters) - Japanese officials raided a facility belonging to Mitsubishi Motors Corp 7211.T on Thursday after the carmaker admitted to overstating the fuel efficiency of 625,000 cars, a revelation that has sent its shares into a tailspin.

A spokeswoman for the company said the raid by members of Japan's Transport Ministry at a plant in the central Japanese city of Okazaki would continue on Friday.

Earlier on Thursday, Mitsubishi shares slid for a second straight day, hitting a record low amid concerns about the potential cost of compensation and fines from the biggest scandal to hit the company since a defect cover-up a decade ago.

The stock has lost a third of its market value, or $2.5 billion, in the last two days.

The problem, which the government has called "extremely serious", came to light after Nissan Motor 7201.T, which markets a model made by Mitsubishi, found a discrepancy in fuel efficiency test data.

It affects two models - Mitsubishi's eK mini-wagon and Nissan's Dayz, with both automakers saying they will halt sales of the vehicles.

JPMorgan auto analyst Akira Kishimoto estimated the cheating could cost Mitsubishi more than 50 billion yen ($450 million), including payments to consumers, the cost of replacing parts and compensation to Nissan.

And while Mitsubishi said the cars were sold only in Japan, the impact could be felt further afield.   Continued...

 
A woman walks in front of Mitsubishi Motors Corp's headquarters in Tokyo May 23, 2013.   REUTERS/Toru Hanai